Global Markets Updates: American stock markets closed at higher levels. The Dow Jones Industrials and S&P 500 indexes recorded record closing highs during a sharp rally in a shortened trading session due to the holiday.
After last week’s selloff, recovery has been seen in AI related stocks. After this, there has been a continuous rise in the American index in recent times. This selloff in AI shares was due to concerns over high valuations and rising capital expenditure compared to profits. For the fifth consecutive session on Wednesday, all major indexes closed with gains.
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Recent data shows that the US economy remains strong. The market is still expecting an interest rate cut of about 50 basis points from the Federal Reserve next year. However, according to CME FedWatch Tool, the chances of a rate cut in January are less.
According to data released on Wednesday, new applications for unemployment allowance in America have decreased more than expected last week.
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The Dow Jones Industrial Average closed at 48,731.16 with a gain of 288.75 points, or 0.60 percent. The S&P 500 gained 22.26 points or 0.32 percent and closed at 6,932.05. Whereas Nasdaq Composite rose 51.46 points or 0.22 percent and closed at 23,613.31. Trading volume on US exchanges stood at 7.61 billion shares, while the average volume for the entire session over the last 20 trading days was 16.21 billion shares.
Shares of Micron Technology closed at a record high of $286.68, up 3.8 percent. The stock saw a rise after the company gave strong guidance last week.
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Banking shares also supported the market rally. The financial sector was among the best performers among the 11 sectors of the S&P 500 and registered a gain of 0.5 percent. The energy sector was the only sector which closed with a decline.
According to Stock Trader’s Almanac, the recent rise in American markets has strengthened the expectations of ‘Santa Claus Rally’. This is a seasonal trend, with the S&P 500 typically rising in the last five trading sessions of the year and the first two trading days of January. This period started from Wednesday and will continue till January 5.
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This year there has been a lot of ups and downs in the American markets. News related to trade tariffs, concerns over high valuations of technology and AI companies and rapidly changing interest rate environment have been the major reasons for this. Wall Street’s ‘Fear Gauge’ has reached its highest level since December 2024.
Despite this, the bull market that started from October 2022 still continues. Progress in AI, expectations of interest rate cuts and confidence in a strong economy have improved investor sentiment. All three major US indexes are moving towards closing at higher levels for the third consecutive year.
In the coming year, the eyes of the global market will be on the possible successors of Federal Reserve Chairman Jerome Powell. President Donald Trump recently said that anyone who disagrees with him will never become Fed Chairman.
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